SAN FRANCISCO — Yesterday was a milestone day for Alaska Airlines. On Wednesday, the carrier finalized its $2.6 billion merger with Virgin America, thus becoming the fifth largest airline in the United States.
The last week, Alaska Air Group received the approval from the US Department of Justice, provided that it would wind down its code share agreement with Forth Worth-based American Airlines.
The milestone was celebrated at San Francisco Airport, where an Alaska Airlines Boeing 737-900ER (N493AS • MSN 41727 • LN 5738), featuring a commemorative red, purple and blue livery and the slogan “More to love,” arrived with Seattle-based Alaska Airlines employees, in order to meet their new co-workers in San Francisco, where Virgin America is based.
“It’s great to be done with dealing with lawyers and Washington DC and all that,” Brad Tilden, Alaska Airlines Chairman and CEO told to an enthusiastic crowd inside Gate 54B at San Francisco Airport.
Alaska Airlines executives said the newly merged airline will focus on becoming the dominant West Coast carrier, with a combined fleet of 286 planes and 18,800 employees. Together, both airlines operate 289 daily flights from California.
On December 21, Alaska plans to announce new daily flights from San Francisco to Santa Ana, Minneapolis and Orlando.
One of the points that Tilden brought up during the event, was how much Alaska needed Virgin America in order to expand its network. Now combined, Alaska and Virgin America, control about 6% of the nation’s domestic flights. The country’s four bigger carriers — American, United, Delta and Southwest — control over 80% of the domestic flights.
Eventually, both carriers will operate as a single one, but in the meantime both carriers will remain independent until branding decisions are made in the 1st quarter of next year. Actually, Tilden referred to this as an “elephant in the room,” a topic that Alaska Air Group is not ready to discuss.
Meanwhile, the early integration steps will focus on the frequent flier programs (FFPs), Alaska’s Mileage Plan and Virgin America’s Elevate members will be able to earn miles on each other’s flights, and their elite members will also receive priority check-in and boarding, on each others flights as well.
“Today is the first day we actually get to get in and loyalty figures internally, profitability figures internally,” says Tilden, who also announced that the Group will be doing market analysis about the customer perception of both airlines.
Virgin America, with its trendy and young appeal contrasts to the sobriety and coziness of Alaska Airlines.
According to Tilden, “Alaska Airlines and Virgin America are different airlines, but we believe different works – and we’re confident fliers will agree. The two airlines may look different, but our core customer and employee focus is very much the same.” He also highlighted that executives will decide in the months to come, how both corporate cultures will merge as one.
The headquarters for Alaska Air Group will remain in Seattle, and Brad Tilden will still be chief executive. Ben Minicucci, chief operating officer of Alaska Airlines, will also serve as CEO of Virgin America.
“We plan to make this the most customer-friendly merger ever,” Tilden said.